Independence Blue Cross, Tower Health reach agreement on 3-year deal

Independence Blue Cross and Tower Health have reached an agreement on a provider agreement for the insurer at five area hospitals just purchased by Tower Health. Shown here is a view of the new Pottstown Hospital sign — which was part of the purchase, along with Jennersville, Phoenixville, Brandywine and Chestnut Hill hospitals.
Digital First Media File Photo

Independence Blue Cross and Tower Health have reached an agreement on a provider agreement for the insurer at five area hospitals just purchased by Tower Health. Shown here is Brandywine Hospital, which was part of the purchase, along with Jennersville, Phoenixville, Chestnut Hill and Pottstown hospitals.
Digital First Media File Photo

“We wanted to get this resolved so our patients and members have confidence and trust in their local providers and didn’t feel threatened by this negotiation going on between Independence Blue Cross and Tower Health. It is good for both of us to get to this point,” Clint Matthews, Tower Health president and CEO, said in an interview Friday.

The two companies issued a joint statement Friday from Matthews and Anthony V. Coletta, president of Independence Blue Cross Facilitated Health Networks.

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“Providing patients, members, and communities continued access to quality, affordable care in this region is paramount for both organizations; and resolving these discussions quickly was in the best interest of members and patients,” the statement read in part.

“We are confident that this agreement will serve as the foundation for a strong relationship between our two organizations,” the statement continued.

It is welcome news to the 120,000 Blue Cross members who were told earlier this week that the hospitals and their providers were no longer considered to be “in-network” with Independence Blue Cross, following the finalization of Tower Health’s acquisition of the five hospitals. Reading Hospital in West Reading will also remain in the Independence Blue Cross network under the terms of the agreement.

“I view this as a win-win-win,” Matthews said Friday. “It’s a win for patients, for members and the Tower Health hospitals — to be able to provide the care that our patients have trusted in for a long time.”

Matthews pointed out that patients should not notice any change, “there will be no break in service — no change in member services.”

Terms of the agreement were not disclosed.

“We wanted to work diligently to get the issue resolved. There was rigorous negotiation. We removed the sticking points we wanted to remove. We’re pleased we have an agreement that is long-term,” Matthews added.

On Sept. 29, Tower Health finalized its purchase of the five area hospitals that had previously been owned by Franklin, Tenn.-based Community Health Systems Inc. The new company became effective Sunday, Oct. 1. Tower Health, which also owns Reading Hospital, had previously been known as Reading Health System.

On Oct. 1, Independence Blue Cross put its members on notice that its provider agreements with the hospitals were ending because the two companies had failed to reach an agreement by the time the sale closed Sept. 29. The insurer indicated at that time that its members would continue to be covered for 30 days.

It also began a communication campaign with members that included letters, digital media and text messaging. Both companies said on Monday they were open to continuing to discuss an agreement.

Coletta told Digital First Media on Monday that the contract Independence had with Community Health Systems Inc. became null once the sale was completed. He indicated the insurer had presented a proposal to Tower Health that would have allowed the agreement to continue — a proposal he said was rejected by Tower Health.

Tower Health had a different take on the issue, however. In a statement issued Monday, Tower Health said the Independence Blue Cross proposal included rate reductions and a non-compete provision in the service areas of the Tower Health/UPMC Health Plan Products, which Tower Health did not accept.

A Tower Health spokeswoman said Friday that the new 3-year provider agreement with Independence Blue Cross does not include a non-compete provision.

The new Tower Health system consists of 11,000 employees and a network of 2,000 physicians, specialists and providers across 65 locations.

Pottstown Hospital is located in Pottstown, Phoenixville hospital is located in Phoenixville, Brandywine Hospital is located in Caln Township, Chestnut Hill Hospital is located in Philadelphia and Jennersville Hospital is located in Penn Township in southern Chester County. Reading Hospital is located in West Reading.